Buyers See Dolphins

As Questionable Catch

December 5, 1993|By ERIC CONRAD Business Writer

Tim Robbie is having his best year running the Miami Dolphins.

His coach, Don Shula, just broke the National Football League record for career coaching wins. Recently acquired players Keith Byars and Irving Fryar have contributed mightily to the team's league-leading 9-2 record.

Today, the Dolphins will set a regular-season attendance record against the New York Giants.

Why, then, is Robbie trying so hard to sell the team his father founded 27 years ago? And why does he appear unable to do so?

The answers can be found in three ugly words: death, taxes and rent.

By now, the legal drama that followed family patriarch Joe Robbie's death in 1990, and set the stage for the Dolphins' impending sale, is well-known.

Briefly, his widow, Elizabeth, sided with five of her children in 1990 and challenged a trust that gave Tim, Janet and Dan Robbie control of the Dolphins. The dispute went to court, but Elizabeth Robbie died in November 1991, before it was settled.

The financial terms of the settlement are confidential. However, the settlement, legal fees and a $47 million estate-tax debt caused what Dolfans are witnessing this season: a proud family struggling to sell a majority stake of its team.

Robbie family members and advisers typically decline to comment on negotiations involving the potential sale of the Dolphins. Tim Robbie did not respond to messages left at his stadium office during the past two weeks.

Said Dolphins spokesman Harvey Greene, "When we have a statement to make, we'll make it."

Tim, Janet and Dan Robbie have made four such statements since June. Twice they announced tentative agreements to sell the team; twice they announced the agreements fell through.

Both prospective buyers, after looking at the Dolphins' books, agreed with experts who say the team is more valuable than profitable.

Financial World magazine this year ranked the Dolphins as the ninth most valuable franchise in sports, worth about $145 million. But the magazine also said the team did not turn a profit during the 1991-92 season, the last for which statistics were available.

During that season, the Dolphins had revenues and expenses of about $53 million. Analysts say both figures are higher this season, probably around $60 million.

-- Better attendance than many South Floridians may think. (JRS sold out for seven of 10 Dolphins games last season. Season ticket sales are up this year.)

-- The team plays well almost every year.

"Quality matters," Megna said. "There are more people in line to buy the Miami Dolphins than the Cincinnati Bengals."

Anyone who considers spending the $130 million to $145 million that the Robbies want for the Dolphins first scrutinizes the bottom line.

Sources with both groups that nearly bought the Dolphins this year said an outsider - H. Wayne Huizenga - holds a key to the Dolphins' profitability.

Huizenga is chief executive of Blockbuster Entertainment. He owns half of Joe Robbie Stadium and 15 percent of the Dolphins. He also owns the Florida Marlins baseball team and Florida Panthers hockey team.

If Huizenga opens a new stadium for his baseball team in four years, as he proposes, the Dolphins' rent payments to the stadium soar. Prospective buyers of the Dolphins say the football franchise is worth $20 million less if the Marlins play outside Joe Robbie.

When he realized this, the Dolphins' first suitor, New York investor Nelson Peltz, lowered his $148 million offer to $120 million. The Robbies refused the lower figure in July, and the deal collapsed.

The second prospective buyer, New York investment banker J. Morton Davis, also confronted the Marlins issue. However, Davis' bid reportedly unraveled because he had a hard time raising enough cash for the team.

"To get that team, buyers should come up with $70 million to $74 million upfront," Megna said. "That's equity money. That's rough."

Huizenga has said his half ownership of JRS will not stop his plans of building a domed baseball stadium with a retractable roof in southwest Broward County.

He said the $30 million he spent in 1990 for half of JRS and a 15 percent stake in the Dolphins was a wise investment. This way, Huizenga said, he has a lot of say in the runnning of JRS until the Marlins' lease expires in four years.

Huizenga's deep involvement spurs speculation that he will buy the Dolphins. Last week, Huizenga and Rick Rochon, president of Huizenga's private holdings company, said there were no developments involving the Dolphins.

If Huizenga does try to buy the team, it will be interesting to see how the NFL reacts.

Many owners respect Huizenga, but the NFL does not allow owners to also own majority shares of other teams, as Huizenga does. The NFL also prohibits corporate ownership. Huizenga has said he wants Blockbuster to invest in sports franchises.

Despite some recent reports, league spokesman Greg Aiello said the NFL has not given Huizenga informal clearance to buy the Dolphins. If the Robbies and Huizenga reach an agreement to sell the team, the matter will go before the owners' Finance Committee. It would also require approval by 23 of 30 owners.

"There's nothing involving the Dolphins before us to act on," Aiello said. "When something does come to us, we'll follow league policy, starting with the Finance Committee."

Huizenga does not have to pursue the Dolphins. His minority ownership guarantees him a chance to match any offer the Robbies get for the team. Huizenga has been playing a waiting game.

"We've got certain rights," Rochon said. "When we have the opportunity to exercise them, we will."